Kenya’s First Mortgage-backed Bond Records 578.6pct Subscription Rate

Kenya Mortgage Refinance Company Medium Term Note received a 578.6 per cent subscription rate equivalent to Ksh 8.1 billion against Ksh 1.4 billion target.

The Parkroad Estate housing project in Ngara, Nairobi

Kenya Mortgage Refinance Company PLC (KMRC) Medium Term Note (MTN) was oversubscribed with bids worth Ksh 8.1 billion being received against Ksh 1.4 billion target.

This is equivalent to a 578.6 per cent subscription rate.

However, KMRC will only take Ksh.1.4 billion of the funds raised for lacking a green-shoe option. The bond was issued in January.

“The success of this first issue represents a resounding validation of our business model and strategy by investors. The cash raised will enable us to blend our inventory of concessional funds and therefore substantially scale up our operations, as we seek to refinance more home loans and make them affordable and within reach for more Kenyans,” said KMRC CEO Johnstone Oltetia.

The KMRC bond is expected to be listed on the Nairobi Securities Exchange (NSE) on March 14 while redemptions on the paper commence in March 2023.

“We attribute the oversubscription to both the small lot size and the attractive yield offering a premium rate above current yield curve levels at 100bps and 82bps above the Kenya Treasury bonds and EABL MTN respectively,” Sterling Capital Research disclosed.

In 2021, the East African Breweries MTN issue had an oversubscription rate of 275 per cent.

KMRC’s primary objective is to provide affordable long-term finance to the primary mortgage lenders in order to increase the accessibility and affordability of home loans to Kenyans.


IK is a Masinde Muliro University graduate. His interests are in news and analysis on women's rights, politics, technology, law, and global affairs.

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